Rally on Wall St.

[notiCIas]

Rally on Wall St.

Major gauges zoom in the early going after Greenspan comments reassure, send bond yields lower.

June 7, 2005: 10:20 AM EDT

NEW YORK (CNN/Money) - Stocks gained Tuesday morning, boosted by reassuring comments from Federal Reserve Chairman Alan Greenspan and falling Treasury yields.

The Dow Jones industrial average (up 66.81 to 10,533.84, Charts), the broader Standard & Poor's 500 (up 6.89 to 1,204.40, Charts) index and the Nasdaq composite (up 10.34 to 2,086.10, Charts) all surged more than 45 minutes into the session.

Stocks had barely etched out gains Monday, as falling oil prices and a number of big mergers failed to inspire a market that had risen for the better part of a month.

However, some upbeat comments from the Fed chief and the corporate developments early Tuesday gave investors a little impetus to move back in.

Greenspan, speaking via satellite to a monetary conference in China, again discussed the previously cited "conundrum" of still low long-term rates worldwide, saying that he expects these rates to remain low, even as short-term rates are rising. Yet, he said that this does not have to indicate a slowing economy.

The bond market seemed to like that.

Treasury prices rallied, lowering the 10-year note yield to around 3.92 percent from 3.95 percent late Monday. Treasury prices and yields move in opposite directions.

The central bank chief is due to address the Joint Economic Committee of Congress Thursday morning.

U.S. light crude for July delivery fell 34 cents to $54.15 a barrel in electronic trading.

Overall, gains covered many sectors, with 29 out of 30 Dow components gaining.

In corporate news, General Motors (up $0.61 to $31.03, Research) said it plans to cut 25,000 jobs in the U.S. by 2008 through closing select assembly and components plants as part of its attempt to rejuvenate its struggling North American business. Shares rose 1.3 percent on the news.

Additionally, fellow Dow component Procter & Gamble (up $0.38 to $55.69, Research) reaffirmed its fiscal fourth-quarter and fiscal year 2005 guidance late Monday. However, shares were little changed.

Among other movers, Albertson's (up $0.38 to $21.88, Research) rose 3 percent in active New York Stock Exchange trade after the grocery chain reported higher-than-expected first-quarter earnings that grew from a year ago.

Fellow retailer Sears Holdings (down $9.25 to $145.66, Research) fell 6 percent after the company reported a loss in its first quarterly report since Kmart purchased Sears, Roebuck & Co. to form the company. Excluding charges, the company posted a profit.

Texas Instruments (up $0.39 to $28.14, Research) inched up ahead of its mid-quarter update, expected after the bell.

Market breadth was positive. On the New York Stock Exchange, winners beat losers more than three to one as 250 million shares traded hands. On the Nasdaq, advancers topped decliners by more than nine to four as 370 million shares.

In currency trading, the dollar fell against the euro and the yen.

COMEX gold fell $1.60 to $426.80 an ounce.

In global trade, Asian markets ended lower and European markets rose at midday.